Autoline Daily

Inventory levels are increasing in the American market, a sure sign that automakers are making too many cars. Lamborghini will unveil a new flagship supercar at the Geneva Motor Show, called the Aventador, which is expected to cost more than $370,000! The average fuel economy of new light-vehicles sold in the U.S. fell last year. All that and more, plus a look at the new 2012 Ford Focus.

INVENTORY LEVELS INCREASING (subscription required)
Several voices in the auto industry are warning that automakers could lapse back into overproducing vehicles, then increasing their incentives to sell them. John Krafcik from Hyundai and Mike Jackson from AutoNation have been warning about this. Now Ward’s reports that inventory levels are increasing in the American market, a sure sign that automakers are making too many cars. In December the industry had an average of 55 days of inventory. One month later that jumped to 71 days. Amongst the major automakers, Chrysler has the highest level of 89 days, but even companies that traditionally run with lower inventory saw their days’ supply go up. Honda is now running with 80 days, Toyota with 76. And then, at the opposite end of the spectrum, Audi has the lowest day’s supply, with 31. But that’s actually too low. Customers are complaining they have to wait months to get the car they want.

SHANGHAI’S LICENSE PLATE PRICES SOAR
But they’d be complaining a lot more if they were buying a car in China. Or I should say, they’d be complaining about the price of license plates. In Shanghai, which is limiting how many license plates it will allow, demand for second-hand plates sent prices soaring. According to Gasgoo, second-hand license plates cost $6,600. The price for a new one is nearly $5,900. Some drivers tried to buy plates from other cities or provinces where the cost is lower, but Shanghai police say they will fine drivers caught in the city during peak hours without the proper plates. And that is what is forcing up the price of second hand ones.

LAMBORGHINI AVENTADOR
Of course, if you’re buying a new Lamborghini, the price of the plates will seem insignificant. Bloomberg reports Lamborghini will unveil a new flagship supercar at the Geneva Motor Show. Called the Aventador, it’s expected to cost more than $370,000! Powered by a 700-horsepower V-12 engine it should be able to blitz from 0 to 100 kilometers an hour in just 2.9 seconds! Top speed is estimated at 350 kilometers an hour – that’s almost 220 miles an hour! If this sounds like your kind of car, Lamborghini is already taking orders. Look for Aventadors in showrooms in the second-quarter of the year.

THAILAND NEAR TOP 10 IN PRODUCTION (subscription required)
Just to show you how much the auto industry is changing, Thailand is set to become one of the top-10 car-producing countries in the world. According to Ward’s, Thailand will build 1.8 million vehicles this year and it will pass the 2 million mark in the next few years. Currently Thailand is ranked number 14 in the world behind the United Kingdom. The growth in Thailand’s auto industry is attributed to its strong economy and investments from foreign companies, especially China.

AVERAGE FUEL ECONOMY DROPS IN U.S. (subscription required)
Old habits die hard. Americans seem to have already forgotten the energy price-spike of 2008 when gas hit $4.00 per gallon. According to Ward’s, the average fuel economy of new light-vehicles sold in the U.S. fell last year as pickups and crossovers gained in popularity. Year-over-year the score dropped 0.2 percent to 22.2 miles per gallon – roughly 10.6 L/100 km. Blame it on relatively cheap fuel and a resurgence in the commercial-fleet sector, which outpaced the rest of the industry. Consumers turned away from small cars in 2010 with the C-segment losing nearly two points of market share. Instead, they bought crossovers, pushing their share to almost 25 percent.

FOUR QUESTIONS FOR RAY LaHOOD
Last week Ray LaHood, the U.S. Secretary of Transportation, announced the results of an exhaustive study by the National Academy of Science and NASA into runaway Toyotas. Some safety advocates say there are mysterious electromagnetic gremlins that cause Toyotas to accelerate violently out of control. But the best scientific minds in the country couldn’t find anything wrong with Toyotas. I have said all along that this is a problem with human error. People are hitting the gas, when they think they’re hitting the brake. Here are four questions that I would like to see the safety advocates and the Department of Transportation try to answer.

1. How come there are no reports of sudden, unintended acceleration involving Toyotas with manual transmissions? There should be at least a small percentage involving manuals, but there are none.

2. How come there are no reported problems of sudden, unintended acceleration outside of North America? Why does this pretty much only happen in America?

3. How come this problem mostly involves senior citizens, and how come most of them are women? If this is an electronic problem, how come it manages to mostly find older drivers?

4. How come it’s rarely mentioned that this is a problem that has been around for years and affects all major manufacturers?

Like I said, driver error explains all these anomalies. But that’s not going to stop the plaintiff attorneys for suing Toyota for hundreds of millions of dollars. And while they will get rich, it is not going to make this problem go away.

Last week I told you about a new podcast in the Autoline lineup. It’s called RoundAbout and you can catch the most recent one in the John’s Journal section of our website, at AutolineDetroit.tv. You can also subscribe to it in iTunes or the Zune Marketplace. The latest show is called “Indulgence” and features Mike Levine of PickupTrucks.com. Good stuff, check it out.

Coming up next, a look at the new Ford Focus. Back right after this.

2012 FORD FOCUS
The C-segment is really heating up. The Chevy Cruze is making strong headway in the market, Hyundai’s new Elantra is a solid offering and Ford is about to launch its redesigned Focus. With a full report, here’s Craig Cole.

We’re in Hollywood, California on the Sunset Strip no less in front of a hotel with supposedly more rock and roll history than the 2012 Ford Focus has new features, and that is a lot. Come on, let’s jump in this thing and take it for a spin.

After years of waiting we’re finally getting the same version of the Focus as Europe, which should be music to enthusiasts’ ears. The car has grown in both size and sophistication but it still knows how to have fun.

Underneath that trendy sheetmetal its updated chassis provides a rewarding driving experience. The ride is firm yet forgiving and body roll is minimal. But the real shocker here is the steering. It’s probably the best electrically boosted setup I’ve ever tested. Dive into a corner and everything feels tight and controlled.

Of course what’s under the hood also plays a huge role in how a car drives. Fortunately Ford made some smart changes there as well.

The Duratec engine is smooth and quiet. Its 160 horsepower has a lot of top-end pull, but I found it a little weak in the torque department even though 146 pound-feet looks good on paper. The car’s curb weigh doesn’t help the situation. It tips the scales at nearly 3,000 pounds which is roughly 300 pounds more than today’s model, making for a power-to-weight ratio of roughly 18.5.

With this car Ford has declared war on inefficiency. It’s fired a salvo of fuel-saving features at it to maximize the MPGs. Certain models are expected to return up to 40 miles per gallon on the highway. That’s just 5.9 L/100 km.

Not only does Ford expect the 2012 Focus to appeal to buyers looking for BOTH fuel economy AND fun driving dynamics but also for what it offers inside. This thing is loaded for technology, some of which you can’t even get on vehicles costing twice as much.

And some of those available features include MyFord Touch, push-button start, Active Park Assist and even a backup camera. But how much does it cost?

Of course buyers that want more can push the price into the mid 20s which is Fusion territory. But no matter where the Focus fits in Ford’s lineup it’s ready to rock and roll.

The Hollywood Bowl is the ultimate for any performer. When you take this stage you know you’ve made it. The 2012 Ford Focus has all the features it needs to be a star, and all that’s left is to see how well it performs on the showroom floor. Reporting from Hollywood, California, I’m Craig Cole.

In the U.S. the 2012 Focus will be offered in two body styles – a four-door sedan and a five-door hatchback. It will also be available in four trim levels, S, SE, SEL and Titanium. Look for it at dealerships soon.

Don’t’ forget to tune into Open Line for the only automotive discussion where you can participate. Join host Michelle Naranjo tonight starting at 8 p.m. Eastern time for Open Line.

And that’s today’s report on the latest news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.

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One more question for Ray LaHood, why is this “seems” to be happening only to Toyota? There may still be something there about how their pedals are placed, size, etc. which of course in manual cars, the placement of the pedals is quite different.

And don’t forget that the utter hypocrite, the corrupt idiot La Hood (what a name, BTW!!!) told his daughter to go buy a TOYOTA SIENNA van, when he told all the rest of us to “Buy American” (And I bet he meant a MEXICAN FIESTA or CON-FUSION!!! LOL)

Just boggles my mind, as to why Ford insists on offering an underpowered engine for the base 2012 Focus. I am sure, the same sad fate will happen to the Focus that is happening to the Fiesta, which is dealer mark up. A decently equipped Fiesta pushes 20k, which is absolutely absurd for a economy sized car built in Mexico. If you look closely at prices for the options on either the Focus or Fiesta, you will see where the extra money is made for these models. Ford dealerships refuse to have any base trim levels that would make most people happy for a first time car, etc. That’s why I always buy used from private owners with low miles and maintenance records and with all the options you could wish without any crazy mark ups.

Well, he wanted her to buy an American-made Minivan, he could have also recommended the Odyssey,(the Caravan is not made here) but with all the dark clouds over Toyota at the time, he knew she would get a better price on the Sienna.

Here’s my report from a weekend visit to a local Chevy dealer north of NYC.*

I walked in and started to crawl around a Cruze for a few minutes until the salesman came over, and I laid my standard line on him, “I’m not buying a car today.” This usually begins the close attention wherein I find out stuff.

1. Cruze has double layer door moldings available. The level of luxury met my standard, which is pretty much stuck in 80′s Bimmers and 90′s Infinitis. I touched all those interior surfaces like any tire kicker would; and this thing feels very good without any Zsa Zsa factor going on.

2. It’s really well built. It’s really easy to get into the back seat, especially as your foot enters at the sill. Even with my long torso there is lots of headroom.

2.5 I asked about ‘conquests,’ but the fellow answered that there was currently no conquest cash for out of brand customers. I meant to ask if they were getting customers out of other makes. He said they were.

3. Here’s the stuff that surprised me. I asked about Volt. I learned that it costs GM 100K to make each car. I did a double take, asked the salesman again if GM itself told him that it costs so much, which he affirmed. I didn’t know that. Maybe this is why Lt. Dan wants to get 10K of cost out. Also, I was told GM is keeping production down in order to gauge demand, which would make sense if they were loosing 55K a pop. The salesman also said that they were selling each Volt for list, with the cars being sold as they came in.

A car has to have good looks before I even consider buying it. The Ford Focus front is as ugly as can be and does nothing for me in the looks department. I saw the car with some friends of mine, at the DC show, and my friends also felt the same. This is a kids car and I’m sure kids will like it, but I don’t think it will sell like the Cruze. The Cruze is beautiful inside out and has great ratings which will make it hard for the Ford Focus to beat.

“3. Here’s the stuff that surprised me. I asked about Volt. I learned that it costs GM 100K to make each car. I did a double take, asked the salesman again if GM itself told him that it costs so much, which he affirmed. I didn’t know that. Maybe this is why Lt. Dan wants to get 10K of cost out.”

I’m sure that it costs GM far more than the $41k dealers charge, or the $38k (?) GM sells it to the dealers, but $100k is absurdly high. So even if they cut $10k, big hairy deal, they are still stuck with a $90k stupid DOG which they have to sell to their dealers for $38k???

John -
You noted that inventories are increasing. Also, incenteives are increasing,espcially at GM. Also,bonuses are back for GM salaried and hourly employees and the Camaro is boasting 550 HP in the ZL1. Sounds like the bad old days, doesn’t it? Oh, yes, and they have money to produce a ZL1, but no money for a new Impala to do battle with the Ford Taurus. And Ford has figured out how to use social network sites, but what about GM? What has GM really learned, any way?

I have never had, nor has any of my family or friends ever had a decent experience at any brand dealership. The whole process of buying a new car has not changed in decades and it always makes people feel anxious and duped. It took me a while, but I finally figured out the scams they try on you the second you walk in the door of a dealership. The usual tactic is the salesman try to hone your attention on amount of monthly payments, not the total price of the car. Then he seems to need frequent trips to “his manager”. That’s a stall.. so they can scan your credit report and all the information you so willing gave them before you had any negotiations. Next comes the high interest rate for financing. Then the absurd low ball offer for your trade in. Then, the add-ons like GAP insurance and extended warranties. Bottom line, you walk out feeling exhausted, stressed and taken to the cleaners. Happy car payments for 84 months at 7% or more interests. lol

HTG: if the $100k figure is correct, then the whole thing is not just insane, it is ABSOLUTELY RIDICULOUS. And very disturbing, given all the 100 s of millions Government Motors got in subsidies to built this worthless POS!

John Mc: How about some investigative auto Journalism to find out what is the true cost of the STUPID, STUPID Volt to GM and the… US Taxpayers?????

Thank Gawd they make SO FEW of them!!!! (only about 400 vs the … 20,000 Cruzes and 25,000 Equinoxes they make every month)

htG, for the sake of all of us, I hope that what this sleazebag meant was that the cost to build a Volt was $100k BEFORE it was mass-produced, sort of like the Fuel Cell Cars that cost $1 million to hand-make but $100k to make en masse.

Re the Inventory report I posted in the morning and John’s comments on today’s show:

Hyundai’s sharp US boss Krafcik complains about a price war. Honda is stuck with huge inventories, and has been historically the worst cheapskate of all makers, they offer few and puny discounts and they do not sell for FLEETS at all!

That’s what I was thinking too, bob. I wondered if the cost/unit would be lower if they make more, like always. But I couldn’t think quick enough to form a question, before the conversaton moved on. And when he said GM was keeping production down due to costs, I just dropped it.

Volt $100K “cost”: The “cost” of any manufactured product depends on how development, design and tooling expenses are allocated to each vehicle over a production run. The $100K figure may be based on an estimated 25K units… or maybe not. I find it hard to believe $100K per unit is just the manufacturing cost for materials and labor.

A geezer asks, what ever happened to FRONT BUMPERS? The front end of the Focus and many new cars look so fragile. Is the idea to just sacrifice everything forward of the radiator in a minor front impact? How do these things fare in the 5 mph test?

A Lamborghini Aventador for $300k+ (230+ mph) or a Bugatti Veyhron for $1.6mil (253mph)?

Jepardy ‘decision time’ jingle here…

DING! – Ahh, Alex, I’ll have to go with neither. Bugatti wants $40k every 15k miles to swap out my wheels. And the Lamborghini’s got a name that I just don’t think I’ll enjoy pronouncing when people ask what it is.

#27, the question should be what happened to bumpers.period. It seems they were sacrificed for the sake of being “stylish” and as Dirty Harry once said: “that’s a hell of a price to pay for being stylish”.in plain English, be prepared to have your ins. co shell out hundreds for even a minor repair

Come on, people. How would a salesman at a dealership have any idea how much it costs to build a Volt? They are usually the last people to know what new products will arrive at the dealership next month, and certainly aren’t likely to know anything about manufacturing cost of the products.

I don’t think GM plans to scale up production of the Volt, as it is mainly a showcase piece to lure potential buyers to the GM brand. It’s an amazing achievement, but way out of the price range for the average middle class Joe. I hope the next generation of the Volt will be cheaper and less complex.

Interesting that after all Toyota’s hype and Hoopla over their Hybrids they’re now finally admitting that advancing the Internal Combustion Engine , creating better transmissions and making cars lighter is the ONLY viable route to Higher Fuel Efficiency with the currently available technology . ( autoweek , NYTimes )

Now if we could just get Obama and the Feds on board with that simple FACT .

@shan ; WTF is so amazing about an over priced under performing Hybrid trying to pretend its an E/V ?

Maybe you need to read Popular Mechanics in regards to the technology and engineering involved with the Chevy Volt. Of course I completely agree with you that it’s over-priced. However, it’s far from being a “Hybrid trying to pretend its an E/V”. Actually, it’s probably the real direction cars will take in the near future, which is extended electric vehicles with ICE assisting a generator for charging.

John. Re: I notice the front suspension on the Aventador. Could it be used in todays car and would it last?
Didn’t Henry Ford say ” horsepower sells cars”
Could the weather be the reason for the high level of unsold cars?

The VOLT is NOT in fact an extended range E/V but is in fact an E/V with some limited Battery priority .

Even the Ultra Liberal , Head in the Sand , God Bless all things Hybrid-E/V State of California has dropped the VOLT from the CA Tax incentive for E/V’s acknowledging that the VOLT is not in fact any type kind or variation of an E/V . It is a Hybrid !

And even if it was ( which it is not PM being wrong in their assessment ) Diesel Electric Locomotives having been doing what the VOLT claims to do for decades .

I’m trying to figure out why Ford’s smaller cars, like the Fiesta and Focus, have high SMRPs, yet the other models remain competatively priced. I wonder if Ford’s motive is to reduce overtime or having to add another shift,thus charging more for higher profits/unit. I also wonder if suppliers problems of ramping up production are impacting prices as well. I’m anxious to test drive a Cruze and a Focus for a side by side comparo.
And for as much as you guys boast about the Prius,I’ll add it to my list just out of curiousity.
Have a good Valentines day with your special someone!

The GM haters are the ones who invented that it cost GM 100k for each Volt they sell. GM has stated many times that they are making a small profit of 1000 dollars on each Volt sold. It’s better than what Toyota did with the Prius. In case some don’t know, selling a car from a foreign country for less than what it costs to build, is called dumping and violates the trade laws. Of course, the Japanese can got away with that because nobody complained.

I hope my information is wrong, jack9877. It comes not from a GM hater, but a dealer. I am no hater. I am so impressed by their cars and trucks now. I’m grateful that the US govt stepped in to manage GM’s bankruptcy. I have only tried to accurately relay what I heard. This is only the internet, after all.

hold onto your little pants now you guys because the comments I am reading today are truly indicative of an astonishing ignorance of the auto industry here in the US, as well as a fundamental lack of basic industry knowledge. And I suppose that is alright as long as individuals don’t spout off like like children about their silly beliefs on a website that I presumed catered to a higher level of analysis.

For brevity’s sake lets just look at one or two aspects of the Volt for a moment. According to Lutz, (and I beleive he would have some insight into this vehicle’s development–that is supposed to be a little joke for you neophytes out there), about half the reason for GM to even offer this vehicle was just to change the image regarding GM, which according to internal studies reflected a stumbling out of touch automaker that was not green, not efficient, not hip, and not loved by plenty of people burned by decades of Vegas, Citations, Cimarrons, Oldsmobile diesels, 4-6-8 Cadillacs, etc. GM was an automaker despised so much that many would not even enter a GM Dealer showroom to look at Chevy or Cadillac vehicles that had improved a lot by the early 2000′s!

So the GM brains thought a “moon-shot” idea might jump start a new vision and new image of the company. Now you can criticize GM (as i have), for refusing to address fundamental issues that truly hamstrung the company from creating impressive vehicles and turning itself around, such as refusing to be aware of how much money the company made, massive lack of accountability throughout layer after layer of the organization, idiotic advertising, almost zero respect for the the heritage of the company from the past, refusing to fully implement lessons from the Toyota/GM tie-up, endless adversarial relations with the UAW that went in both directions, etc

Yet as dysfunctional as GM has been in the recent past they did understand that the Volt would NOT be a money maker and indeed would typically need to be subsidized, hence the astonishing lease deal, and government tax breaks (from both federal and some states as well)!

There are so many comments today–on just the Volt alone–that illustrate a fundamental lack of industry/automotive studies and reviews, that it might be wise for you fellows (and any gals out there) to restrain your views until a little bit of research has been completed.

So the brains at GM think that I will go to a Chevy dealer to look at a car I can’t afford to buy, GM can’t afford to sell and am bored with already (just a chargeable Prius), and in the process I will buy another Chevy that I can afford and GM will make money on. Pure genius! Look out Packard – here comes another one!

Hey Gary Paul, you talking to me? Don’t start calling names on this board, when everything you’ve written is so well known, it’s too boring to repeat. Everyone knows Volt loses money, and that it’s a halo car intended to change GM’s image. Everyone knows new technology takes time to amortize. Everyone knows that every iteration of the drivetrain of Volt will be cheaper or more oriented toward a particular use. Are you so stupid, you think we’re stupid? My little report on Volt’s costs only highlighted the possible magnitude of how much GM and the US paid.

The above headline juxtaposes with articles recently published in both the Detroit News and the Detroit Free Press about how hydraulic fracturing (“fracking”) is increasing oil production in the U.S., by enabling us to access oil that otherwise would be too tightly bound for us to access with previous oil drilling technology.

If carbon dioxide buildup in our atmosphere is indeed so serious as to justify the kind of regulatory aggression that has already come to pass, let alone what is being proposed, then the recent fall in oil prices resulting from “fracking”, is not good news.

Granted, a collapse in world oil prices may give us the satisfaction of seeing Middle East oil sheiks sweat. But it also means destruction of what would otherwise be a natural economic incentive for people to purchase the fine 4 cylinder cars we now have, like the Ford Focus. So if we have to reduce CO2 either due to global warming or some other ecological consequence of too much carbon dioxide, and if untaxed oil becomes too cheap to create natural economic incentives to conserve, we should put a good stiff tax on coal and oil.

I would rather see that, than to have government micromanage every aspect of our transportation/energy economy and our lives.

The above headline juxtaposes with articles recently published in both the Detroit News and the Detroit Free Press about how hydraulic fracturing (“fracking”) is increasing oil production in the U.S., by enabling us to access oil that otherwise would be too tightly bound for us to access with previous oil drilling technology.

If carbon dioxide buildup in our atmosphere is indeed so serious as to justify the kind of regulatory aggression that has already come to pass, let alone what is being proposed, then the recent fall in oil prices resulting from “fracking”, is not good news.

before you post your lengthy, condescending comments, whose substance is unfortunately inversely proportional to their length, LEARN TO SPELL “believe”.

The VOLT was a MORONIC idea from the get-go, and in fact it was no idea at all, it is a plain and simple PLUG IN HYBRID and GM was sure not the first one to come up with the concept.

The STUPID Volt is not even needed as a GM “HALO CAR”, aka a low volume $-losing car that will attract customers to its showrooms.

GM already has plenty of HALO CARS and they are not losing $ either. Take the mighty CORVETTE for example, and especially that bargain SUPERCAR the Awesome COrvette ZR-1 or whatever, the Ferrari Killer.

My guess is that penske saw the $4 prices and bet they would stay high, hence he tried the “Dumb”.

But even without test driving that POS and experiencing its god-awful transmission;

His common Sense should have told Penske, that when some little POS 2-seater is introduced in EUROPE of $8 gas and narrow streets and parallel parking every day, and loses BILLIONS of euros for TEN years in a row,

What hope would that little POS have in the USA, with our $3 gas and ample spaces?

Re. Penske, it could get worse, if they try to import the terrible Tata Nano from India. Instead Penske should invest in an honest-to-goodness used car dealership network to compete with the rip-off masters, Carmax.

Pedro @ #2: Pacemakers may cause unintended acceleration in Toyotas! Wish I thought of that! Could be compounded by all the metal in those knee and hip replacements. But, if true, I would expect the same problem in Buicks.

Whatever one might think of the the Volt, everything I’ve read is that it drives pretty well for something new, and that you’d expect to be “underdeveloped.” Autoweek basically said that it drives like a “real car,” which is a compliment. When the battery is depleted (after about 35 miles according to both AW and CR), the gas engine starts, and in a surprisingly transparent way.

I wouldn’t want a car like this, or a plug-in Prius which will be available in the next year or so, because they wouldn’t make sense for me. I’d have no place to plug it in while in Florida. When in Indiana over the summer, I’d have a place to plug it in, but I have no desire to burn coal to power my car, which is what you are doing with a plug-in car in Indiana.

Presumably a next-generation Volt would be cheaper, and better than this first one, but it seems that the current works reasonably well. As far as price, that’s another story.

Bob, there are some people that just won’t buy used, they’d rather get a new POS than for the same $ get a nice, used alternative. How can you explain all those horrible new cars that Americans have spend their hard-earned money buying new, throughout history and then regretted buying. Dumb, Vega, Pinto, Chevelle, Excel, Yugo……..

If it ever comes to the US, i can imagine the commercials, using the old hit by “The Doors”:

“Baby, Baby light my fire”

PS there is no accounting for taste. We will have a guest here tomorrow and Thu who has plenty of $, lives in a home that cost half a million back in 1996 and probably much more now, but commutes in a PONTIAC AZTEC (!!!), and probably does not wear a brown bag over his head. His “reasoning” is that he wanted a bargain-priced POS that had enough mass and cargo capacity which he could get with low miles used and then drive the hell out of it.

Needless to say that dude does not worry much about how he, his wife or his vehicles look, and the home was expensive probably as an investment and not because he appreciates the good things in life.

GPL, the numbers you cite make sense and show that it was feasible for a large co to absorb some small losses on a promising model without having to rely on the taxpayer like GM and the EV makers do. $1000 is nothing compared to whatever the loss is on each VOlt ($10,000 is just what the CEO told the team to take off the cost!!!, so I would guess at least $25,000 loss per unit!)